8.32 (LO 1) Identifying relevant costs and decision making It had been a quiet Monday morning for Anna Hogue, senior project manager at Flagstone Consulting. Everything seemed to be falling into place for the company's first conference, "Healthcare Management in the New Millenium," scheduled for October 11 and 12 in Boston. Then Ethan Tang, the staff consultant in charge of registration, stuck his head in the door. "Anna," said Ethan, "I think we may have a problem with the conference. Only 10 people have registered. Our marketing consultants told us to expect at least a 3% registration rate from our direct mail campaign. Based on the 5,000 conference fliers we mailed, do you think another 140 people will register in the next three weeks?" Anna and Ethan had worked together to develop a budget for the conference, as follows. They had budgeted for registration response rates of 2%, 3%, and 4%, but a response rate of 0.3% was far outside their expectations.

Registration fee in00rne Expenses Meals Conference materials Direct mail advertising Meeting room rental Equipment rental Speaker fees: Neudon Smith Townsleyf Speaker travel: Newton Smith Townsley ComptenE Total expenses Net income {Townsley' required a $1.000 deposit upon conrmation of the original conference date. The remaining 53,000 was due upon her arrival at the conference. In the event o'feanoellaen, the 51,000 deposit was nonrefundable. Efnmpton has agreed to speak for free. 2% Response Rate Total Per Attendee 560 500 15,000 7:500 6,000 4.500 500 600 2,000 4,000 200 1,200 1,000 200 a2, ZOO 526,800 8695 $150 75 3% Response Rate Total Per Attendee $10422 50 5695 22,500 S150 11,250 75 6,000 4.500 500 600 2,000 4,000 200 1,200 1,000 200 _531252 $ 50,300 4% Response Rate Total Per Attendee $1 000 8695 30,000 $150 15,000 75 6,000 4.500 500 600 2,000 4,000 200 1,200 1,000 200 65,200 $ 23,800